While PPOs can save patients and companies money in the long-run for those outliers with a complicated medical history who need to see specialists, they’re by no means a slam-dunk bargain for patients and companies.

#1 Your Broker Works For You

Basically, Chase says that the $22 billion benefits consulting industry is geared towards creating plenty of compensation incentives for brokers that, by and large, conflict with companies’ objectives–“because their income increases as overall per capita healthcare spending increases.” These brokers are sold as “buyer’s agents,” but in reality they’re seller’s agents.

#2 Insurance carriers want to drive down costs and PPO networks to deliver the best pricing available

While it can seem like PPOs are working hard, negotiating discounted prices for their customers, the problem lies in how the insurance carriers and health providers arrive at the base, non-discounted price. The average PPO network pricing is “260 percent of Medicare. While there are some markets where average commercial payer pricing is lower, there are many more where the number is significantly greater–as high as 1,000 percent of Medicare in some places.” So while it may seem like a great discount when the PPO is slashing the providers’ costs in half, it’s still more than two-and-a-half times the more sensible, rigorously priced Medicare standard. The PPOs basically are charging people a premium to have access to their “discounted” rates, all the while they’re still grossly overcharging and not pushing for any change.

#3 Auto-adjudication of claims is always good

PPOs like to tout the aspect of their business that there’s auto-adjudication–that is, automatic payment of claims. Essentially, claim administrators receive a vague, unspecific Uniform Bill from a hospital, they deduct the PPO discount from the price, and pay the bill. The problem is, there’s no detailed explanation of services rendered, allowing for price abuses and an overall lack of accountability.

PPOs present themselves as a cost-saving, flexible alternative to HMOs, but in reality, they’re just shaving a little slice off of a massively overpriced bill–that they’re not even spending time vetting.